Tuesday, August 30, 2016

"What Happens Next May Put 
Financial Repression & Central Bank Failure
To Shame" - Helicopter Money
Article highlights the push at the Jackson Hole summit to push for massive fiscal stimulus relative to monetary stimulus which has proven to be ineffective .. a lunch address by Princeton University economist Christopher Sims, "policymakers were told that it may take a massive program, large enough even to shock taxpayers into a different, inflationary view of the future .. Fiscal expansion can replace ineffective monetary policy at the zero lower bound .. It requires deficits aimed at, and conditioned on, generating inflation. The deficits must be seen as financed by future inflation, not future taxes or spending cuts." .. Zero Hedge: "In other words, openly monetizing the debt with the intent of generating runaway inflation: think helicopter money on steroids, a strategy that ultimately risks the dollar's status as a global reserve currency .. So there it is: all it will take for central banks to get their wish - world governments shocking ;into an inflationary view of the future - is for the economy to collapse. Because if the Lehman bankruptcy launched the greatest wealth transfer in history from the middle class to the world's wealthiest, so the next U.S. recession.'"
link here to the article

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